Microsoft 'will not change Windows'

MICROSOFT does not plan to change the Korean version of Windows, despite demands from Korean trade authorities and an impending ban on Windows sales in the country, the company told the INQUIRER.

The software company must remove its media player and instant messaging programs from products including Windows XP and Windows Server 2003 within 180 days - or stop selling them in Korea, according to a ruling by the Korean Fair Trade Commission (KFTC) announced today. Future products like Windows Vista are also affected. The KFTC ordered Microsoft to offer two versions of its Windows product line, one with the messaging and media player software removed, and one with links promoting competing products.

Microsoft has yet to receive full details of the required changes from the Korean Fair Trade Commission, but at the moment, the company "will not start" to make the requested changes, said Asia Pacific regional marketing manager, Oliver Roll. The company will appeal to the Korean high court, and ask for a delay in implementation of the ruling, he said. If the ruling does take effect, it will have a negative effect on Korean consumers and business, Roll added.

In October, following notification from the KFTC over the remedial actions the trade body could take, Microsoft issued a warning to investors that it might have to "withdraw Windows from the Korean market or delay offering new versions in Korea."

Today, however, Roll said, "from the remedies we've seen [ordered by the KFTC] today, it looks very likely that we'll be able to continue selling Windows in Korea," Roll said.

But if legal appeals fail, the company's tardiness with similar work in the past suggests Microsoft may genuinely be unable to complete the changes in time for the commission's 180 day deadline - potentially forcing it to withdraw Windows completely from the Korean market. Roll said the changes demanded in Korea were far more complex than those ordered last year by European regulators, pointing out the negative effect this would have on Korean software developers who work with Windows. However, even the simpler European changes took Microsoft over one year to bring to market, after EU regulators told the company to make a version of Windows without Windows Media Player.

Mike Davis, a senior analyst with Butler Group, a UK think tank, points out that it shouldn't really take so long for Microsoft to respond to regulatory rulings of this type. "It should not be too difficult to unbundle," he said, "Microsoft itself has offered to produce 'custom built' Windows offerings, for example for the UK Health Service."

According to the KFTC's findings, Microsoft's decision to bundle Windows Messenger and Media Player with Windows in Korea was followed by the virtual disappearance of competing products - by Daum and Real - from the market. Although it did somewhat torpedo its own argument by noting that a new messaging application from a third company, Nate-On messenger, had subsequently arisen to grab a significant chunk of Microsoft's newly-won market. The company earlier this year paid hundreds of millions to settle related cases with Daum Networks and RealNetworks. Microsoft enjoys a 99 per cent share of the desktop operating system market and a 78 per cent share of the server market in Korea, the report said.

Although Linux developers, such as TurboLinux in Japan and Linspire in the US have said they see the Korean tussle as an opportunity to expand market share of other operating systems, even a withdrawal of Windows won't necessarily produce that effect.

For example, Mike Davis of Butler Group has pointed out that Koreans will still be able to get pirated versions of Windows as easily as they can now - although they would no longer get official updates to Korean-language components, of course.

As is customary in all its antitrust cases, Microsoft has pointed out that innovation will suffer. µ

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Earlier INQ report